How union minister made Sh3.1bn deal

By Mwinyi Sadallah

13th May 2012

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Minister Samia Suluhu Hassan

A Zanzibar House of Representatives select committee report has revealed that Changuu tourist island was cheaply leased to a private firm, Leisure Hotel Limited, denying the government millions of shillings.

According to the report, the 11.27- hectare island was leased in 2002 for a period of 30 years at a rate of $1000 a month.

The report reveals further that the controversial leasing was effected in December 2002 by then Minister for Tourism, Trade and Investment, Samia Suluhu Hassan, in collaboration with the Zanzibar Investment Promotion Agency (ZIPA).

Samia Hassan is currently Minister of State in the Vice-President’s Office responsible for Union affairs.

The committee findings show that prior to leasing Changuu island, the Zanzibar Tourism Corporation (ZTC) was collecting $5,500 a month as government revenue through fees charged tourists who visited the island.

“The Zanzibar Tourim Corporation was paid Sh 40million so as to release the island for the lease,” affirmed the report, which has sparked heated debate among Zanzibaris and members of the House of Representatives.

The committee has made it clear in the report that the claimed little fee of $1000 a month was paid by the investor in 2004 when it was reviewed following complaints that the leasing agreement was not beneficial to the government.

The report states: “The committee was not satisfied by the fee rate even after it was reviewed to $3,500 per month, which is the current operative rate.” When interrogated by the committee, ZTC manager Sabaha Salum said that when the island was under his office monthly revenue collection stood at $ 5,500.

However Salum told the committee that ZTC’s role was confined to promoting tourism on the island, adding that the leasing of the island was effected by the Ministry of Lands in collaboration with ZIPA

Commenting on tortoises which are the island’s major tourist attraction, Salum noted that they were also leased to the investor, Leisure Hotel Limited, under a special agreement which was approved by the government valuer.

He also revealed that his corporation had planned to lease the tortoises to Zanzibar Parks, but the government put the plan on hold after it opposed by some sections of Zanzibaris.

Information provided by ZIPA indicated that the investor was handed over Changuu island in August 2003 with a view to upgrading investment facilities on the island, a project which was expected to cost $ 1.1million. He said the investor had so far built a 27-bedroom complex for visitors .

However, when quizzed by the committee, ZIPA accused the investor of not being forthcoming with regard to tourist statistics and revenue, contrary to the laws governing investments in Zanzibar which require an investor to provide such data every three months.

“It is not clear how much revenue the investor collects from the business on Changuu island,” stated the report.

The committee has recommended that the government takes appropriate measures, including ordering the investor to provide information on revenue and visitor statistics on tourists within three months from the date of tabling the report in the House of Representatives.

It has also recommended that a new a valuation of land be conducted and a review of the land lease be made. “The government should ensure it properly supervises this investor so as to be compliant to the laws of the land. This should apply to all the investors,” recommended the report.

However, the committee has registered its satisfaction over the manner the investor has preserved the island’s environment since taking it over.

Changuu island has been a major tourist attraction in Zanzibar due to its history, including the fact that it was at some time used as a prison before the January 12, 1964 Zanzibar revolution.